Invest in tax compliance measures, Govt urged

ESTHER MSETEKA, Lusaka
ACTIONAID Zambia (AAZ) has called on Government to strongly invest in tax compliance measures ifÂ it is to collect sufficient tax revenues for developmental projects.ActionAid Zambia country director Nalucha Ziba said although in the 2017 budget there are a number of strategies put in place to address tax compliance such as appointing of tax agents, more needs to be done to achieve economic growth.
In a statement to review the performance of the economy in 2016, Ms Ziba said there is need for Government to evaluate and re-negotiate all outdated tax agreements to ensure that sufficient revenue is generated.
She said it is important that Government puts in place policies that will enable it efficiently collect revenue from all avenues in the existing system as it plans to create new ones.
â€œRecently, the National Road Fund Agency (NRFA) started implementing a system where all road contractors are required to harmonise their tax position with the Zambia Revenue Authority (ZRA) before they can receive their payment from the agency.
â€œThis is a good measure that should be adopted by all government agencies as it will encourage tax compliance. Government should ensure that withholding tax rates in the tax agreements are as high as possible as this would ensure collection of tax revenue,â€ Ms Ziba said.
She said the 2015 Auditor Generalâ€™s report shows a failure to meet revenue collection andÂ withholding tax being the highest amounting to K1,450,533,510.
Ms Ziba said this is an indication that the authority needs to put in more effort to collect enough funds to avoid revenue losses of such magnitude as Zambia plans for its economic recovery.
â€œIn addition, the authority underperformed on 15 tax types whileÂ Central Statistical Office observed that inefficiencies in the collection of tax arrears increased by K18,013,748,643 from K6,417,054,273 in 2014 to K24,430,802,916 in 2015.ActionAid Zambia feels that the collaboration between ZRA and other government agencies needs to be strengthened in order to realise this,â€ she said.